Bitcoin Has to be More than Just Property

You should be able to buy drugs with Bitcoin. 

Not just drugs, anything you want. 

Your coffee, your rent, a birthday gift for your child.

Anything.

The first line of the Abstract in the Bitcoin White Paper states a rationale for Bitcoin’s formation as “A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.” 

The original intention for Bitcoin was to allow users to directly pay each other with no need for a middleman. Bitcoin was meant to emphasize an individual’s freedom of exchange. 

Bitcoin was meant to be more than just “property” that accumulates value. 

Bitcoin is a digital version of cash. By removing the need for third-party financial institutions to process payments, Bitcoin enables people to pay each other as seamlessly as exchanging dollar bills in person.

The Silk Road, the now infamous website, was the first place this functionality reached a more mainstream user base. On the site, users could freely purchase illicit items such as drugs, fake passports and IDs, pornography, and anything else they wanted as long as the item’s purpose wasn’t to “harm or defraud.” Users had freedom to purchase and that freedom was exercised with every payment being made in Bitcoin. That's Bitcoin's origin story. It's not pretty, but it emphasizes more than anything that Bitcoin is freedom money, even if it's for illicit purchases.

If you can no longer freely purchase, or choose not to, you have lost a significant value proposition of Bitcoin—the proposition to buy anything you want. The conversation about buying drugs is less about the item purchased and more about the idea that a core functionality of Bitcoin is peer-to-peer exchange. A conversation that says without a healthy market of millions, and eventually, billions of people, using Bitcoin in a peer-to-peer way, the total value proposition of Bitcoin fails to reach its greatest potential.

Let’s discuss a world where Bitcoin is largely treated as “property” with relatively few peer-to-peer interactions. 

In this scenario, the vast majority of Bitcoin is treated as only “property” held by custodians (think Bitcoin ETFs). In this scenario, an Executive Order to capture all of the Bitcoin becomes much easier to enact because there are a few giant holders compared to billions of people holding Bitcoin in individual wallets. This scenario would enable the government to confiscate Bitcoin like they confiscated gold from the citizens in the 1930s. 

In this same scenario, in a world where BlackRock, Fidelity, and all of the other financial institutions continue storing massive amounts of Bitcoin in their wallets as “property,” we may reach a point where the common man will not be able to do anything with Bitcoin on a peer-to-peer basis. 

Transactions on the network will decrease and Bitcoin will lose a key piece of its value proposition, the spend and transact aspect, because massive amounts of Bitcoin are doing nothing but acting as “property.” In this sense, the ability to freely transact with Bitcoin would be gone. 

For Bitcoin to reach its highest potential and to change the world in the way Satoshi Nakamoto envisioned possible, Bitcoin has to be more than just property. It has also to be a tool people use to facilitate the purchases they need to live their lives the way they want to live.

You must maintain the freedom to transact with Bitcoin and continue to do so. 

Stack SATs.

The views and opinions expressed here are for entertainment purposes only and should, in no way, be interpreted as financial or investment advice. Always conduct your own research when making an investment or trading decision, as each such move involves risk. The team members behind Triana are not financial advisors and do not claim to be qualified to convey information or advice that a registered financial advisor would convey to clients as guidance. Nothing contained in this e-mail/article constitutes, or shall be construed as, an offering of financial instruments, investment advice, or recommendations of an investment strategy. If you are seeking financial advice, find a professional who is right for you.